RE FINANCING Flashcards

RE FINANCING Flashcards Which of the following defines the term "equity": Any of the above- the owner's interest in real property, over and above all liens against it- the difference between the loan amount and the value or price of the property- the initial down payment on the property General, as the employment rate and the GNP (Gross

National Product) both rise:

All of the above will occur- the level of person income rises- new residential development will increase in number- Sales of existing homes will remain level or in-crease Loans from some lenders must comply with the Real Estate Settlement Procedures Act. When the loan is secured by residential real property, and contains 1-to-4 residential units, the loan must comply with the RESPA regulations if

the loan is made by:

Lenders whose deposits are insured by an agency of the federal government In computing the unspecified maturity date on a construction loan, the time for repayment of the loan starts

running:

From the date of the note Which of the following types of lenders would have the greatest percentage of, and the most funds invested in, real

estate mortgage:

Savings and loan associations Which of the following would usually be true concerning a

hard money second trust deed:

it is secured by real estate and given to a third party to obtain a cash loan Carter needed $2,000 to buy a car. Broker Denton negotiated the loan for him. Carter gave the lender his note for $2,400 secured by a second deed of trust against his home. The note was payable $77 per month including 10% interest per annum over a three-year term. Carter signed a broker's loan statement showing that he would receive an estimates $1,980 from the completed transaction. The total

principal amount which Carter must pay to lender is:

$2,400This is the principal amount of the note which Carter and, therefore, the amount which Carter must pay to the lender According to the generally accepted practices, an escrow

agent is authorized to:

call for funding of the buyer's loan Which of the following is the most difficult for the mortgage

lender to evaluate:

The degree of risk inherent in the mortgage When a trust deed is sold, the parties often use an escrow

in order to:

Make sure the conditions and terms are met prior to the closing of the transactionThis is the purpose of any escrow."The measure of good and services produced by the nation during any one calendar year" is the definition of which of

the following:

Gross nation product When comparing a straight note with an installment note,

the straight note:

Will have no principal payments during the term of the loan except on the last payment Which of the following agencies increases the availability of mortgage credit by maintaining a secondary market for

residential conventional mortgage?Federal Home Loan Mortgage Corporation

Under the Federal Truth-in-Lending Law, the cost of credit

on certain loans is expressed as:

an annual percentage rate When a lender loans a borrower 100% of the purchase price of a house, and the loan is not government-related,

the lender would be best protected by:

AppreciationIf the property appreciates in value, this would provide some money to pay any costs of foreclosure if necessary.The Uniform Settlement required by the Real Estate Settlement Procedures Act by law shall be delivered or

mailed to the borrower no later than:

At, or before, the date of settlement The term used by lender, "mortgage yield" best describes:The effective interest return obtained from a first deed by an investor A "GPAM" morgage loan provides for:Deferment of certain payments on the principal during the early period of the loan When financing a home with a long-term loan, if equal payments are made, the amount of each payment applied

to the principal will:

Increase while the interest payment decreases "Depression, expansion, prosperity, and recession" are all

terms related to which of the following types of cycles:

Business Ms. Rodriquez received a loan application from her lender that asked her to specify her marital status and ethnic

background. Legally, she can:

Refuse to fill out that portion of the loan application A prudent investor, to hedge against the erosion of capital

caused by inflation, would logically place funds in:

Equity interests Which of the following is the purpose of the Federal

Truth-in-Lending Act:

To provide consumers information concerning the cost of credit All of the following might be reasonably included in a lender's monthly impound requirements for a borrower,

except:

Mortgage interest prorations When the required payments on a real estate loan are

insufficient to pay the interest due, the result is:

Negative AmortizationNegative amortization means that the amount of principal is increasing. If the payments do not pay all of the interest the amount of the unpaid interest will be added to the principal.If an advertisement is placed in a newspaper advertising a house for sale, and only the annual percentage rate is

stated:

Additional disclosures are not required A straight note:May be any of the above:--May be used in a real estate transaction;--Is a note providing that the principal owing is to be paid at one time;--May be secured by a mortgage The provisions of the Real Estate Settlement Procedures Act (RESPA) apply only transactions involving certain types of property. Of the following, which types of property must comply with RESPA.one-to-four family residential dwellings Which of the following statements about real estate

financing is incoo:

A promissory note is security for a mortgage A lender who refers to a loan as "seasned" is referring to

the :

Record of consistent payment on the loan

When the general level of prices decreases: The value of money increasesWhen prices decrease, money becomes more valuable since it can buy more goods When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately larger for the first lots that are sold. The

reason for this practice is:

All of the above- To increase the security value of the remaining lots;- To compensate for the loss of security as the lots under the blanket encumbrance are removed; - To compensate for the loss of security due to the best lots being sold first Property is being sold whereby the purchaser is to continue the payments of an existing amortized loan secured by a first mortgage. In order for the buyer to assume the existing mortgage without penalty, the real estate agent should

check to be sure the mortgage does not include:

An acceleration clause Insurance can be described as:All of the above- Transferring the risk loss from an insured to an insurance company.- The substitution of certainty for uncertainty.- Protecting the insured against loss in accordance with the policy for the amount insured and for the period of time agreed upon.When obtaining a mortgage loan, the buyer often has to

pay discount points. Those points are a percentage of:

The loan amount*Loan points (discount points) are a percentage of the loan amount.When an escrow agent holds the buyer's deposit money because of a dispute between the buyer and seller, the escrow agent can release the funds in which of the

following circumstances:

In any of the above circumstances.- Upon receipt of written instructions signed by both the buyer and seller- Upon receipt of an arbitrator's award- Upon receipt of a court ruling A "FICO" score is normal used for which of the following:Reporting the credit history for a prospective borrower Mr. and Mrs. Martin have sold their home, with the escrow scheduled to close on March 1. The annual property taxes on their home are $1,440. Assuming that the first installment of taxes has already been paid, and the second installment is to be prorated on the date of the close of escrow, the amount of the taxes which would normally be

charged to the buyer would be approximately:

$480The monthly taxes are $120.The tax year runs July 1 through June 30.The buyer would owe taxes for March, April, May, and June (4 months); hence, $480 When making a loan, amortization table are used in order

to determine the:

Monthly payment Which of the following statement is true concerning escrow

procedures:

When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency When processing a real estate loan application, a lender would correlate characteristics of borrower, loan, and property to make.A loan commitment When a lender speaks of "discounting," the lender is

probably referring to:

The loan proceeds disbursed by the lender are less than the face value of the note Interest rates on trust deed loans are primarily determined

by which of the following:

Demand for supply of money